Cognitive Theory and Tax

Although legal interdisciplinarity is in the vogue, a systematic study of psychology as applied to the existing tax system has yet to emerge. This Article uses cognitive theory to explain major structural features of our tax system and argues that cognitive tricks must be considered when developing any general normative theory of tax. Cognitive theory suggests that the public will pay attention to certain aspects of taxation more than others based instead on the tax's relative visibility; and, people's decisions to invest money in fringe benefit plans, tax shelters, and home ownership depend on their perception of the concepts